Dr. Mihaela Ulieru is a scholar of distributed intelligent systems, having pioneered a series of technologies that are bundled under the collective name of “Blockchain”, which consists of over 200 peer reviewed publications, hundreds of invited keynotes and talks, advisor to governments on the adoption of emerging technologies to improve the lives of citizens, as well as mentor to many successful entrepreneurs. In the beginning of her career she advised Garret Camp, the co-founder of Uber and founder of StumbleUpon on his MSc Thesis.

Dr. Ulieru advocated to include blockchain among the Top 10 future and emerging technologies at the World Economic Forum in 2016. Currently she is an innovator at the edge of the impossible for Endor (aka Chief Alchemist) – an MIT start-up bringing a series of breakthrough innovations to enable predictive analytics as a shared service on blockchain. Learn about Dr. Ulieru’s role at FinTech Connect 2018 here.

This week, FinTech Connect Content Director Carly Greene sat down with Dr. Ulieru to discuss the opportunities and first steps of the ‘Blockchain Revolution’.

C: What are the greatest opportunities for blockchain as you see them?

M: In order to address your question I’d like to refer to the major innovations that blockchain is bringing about. The first one is the distributed ledger, which allows storage of value in the form of digital assets as immutable transaction records. This is streamlining the convoluted processes with the ability of record verification, keeping track of spending, tracking money flows and so on. All these immutable ledgers cannot be modified except with consensus from all, or, from designated parties depending on how you have your consensus staged.

The next major innovation is the ability to use a token to incentivize participation in the creation of a social network around your project. This, in turn, creates microeconomics that can be played by design in many ways. For example, at Endor.com we use tokens to make the powerful prediction technology based on “social physics” accessible to everyone. On the one side, tokens incentivise businesses to expand the areas of use for the prediction engine, as well as to add new data to a pool which can be used by everyone to get better predictions.

On the other hand, tokens incentivize the outsourcing of expertise by rewarding everyone who enhances the prediction engine with new algorithms. Example – we actually made a donation of 50 million dollars from our token sale to MIT to incentivize the extension of our algorithmic engine and tokens can be used to incentivise the formation of partnerships.

One unique capability is an unprecedented way to enable the merging of legacy infrastructure with novel Blockchain services, thus supporting the transition of our big enterprise customers to the Endor protocol in order to have access to better predictions which use our larger pool of aggregate data.

C: How does this feed into the data conundrum and help individuals take control of their identity?

The convergence of blockchain, artificial intelligence and internet of things has incredible potential, but again, it’s the data that is the weakest link. Privacy of course should be protected, and because blockchain has the ability to minimize access to information through encryption, this is one of the key benefits. This is an interesting part of what we work on at Endor.com – the unique ability to run aggregate analytics over encrypted data without any keys to obtain predictions while preserving the privacy of the data owners and of the data-subjects (whose data maybe in the encrypted data set). This approach provides greater compliance to GDPR (General Data Protection Regulation).

In regards to identity information, I’m very passionate about this topic. In particular, one other company that I advise, Sapien.Network, have developed the ‘Facebook’ on blockchain with the very purpose of rescuing people’s data from the conundrum you refer to in your question.

The idea of identity via blockchain gives people sovereignty through the ability to take possession of their data. It is the person that now owns their identity, and they are sovereign over it. They can reveal only what is needed in a particular context. For example – if I go to a bar, I don’t need to show them my driver’s license, so that person can see my address and my age etc. I can now show them a pointer which testifies that I’m over 18. In this way, being able to control our identity is really empowering the individual.

Another aspect of this can be seen in healthcare, where the patient can now own their medical records and share this with any doctor they wish – because of blockchain’s capabilities, this is now possible.

C: How are organisations using blockchain to reap its innovation?

M: The lowest hanging fruit, of course, is the distributed immutable ledger innovation aspect of blockchain. It is applicable for tracking expenditures and produce in supply chains by sharing and keeping track of any changes of information on any record. This way, in any situation, blockchain will demand what I call ‘a shared truth’.

Large organisations can benefit by running all their shared services on this ledger which leads to the streamlining of processes through the abolition of paper records and abolition of fraud because blockchain is also a truth machine, according to the book by Michael Casey and Paul Vigna, and has an almost magical effect on this immutable ledger.

When most large organisations are about to implement blockchain as a ‘truth machine’, Endor is pioneering the adoption of the second innovation. We use the token to incentivize participation, which does not have to do with cryptocurrency per se, but to reward people for actually participating and offering their data to be used in our engine.

Another example is big advertisers who are pushing advertisements through the current centralized social media platforms. Rather than pushing advertisements to the people that are interested in them these centralised platforms are simply showing us things based on some random algorithms, and we tend to receive the wrong information that we have no interest in.

Now, with blockchain, you can have a direct person-to-business connection in which you receive and see the right advertisements for your needs, direct from the business. Further to this, you can be rewarded with a discount (or in tokens) that you can use to purchase the respective product. Suddenly, it’s not the social platform who is taking the advertising money anymore – Using tokens to incentivize people is part of the innovation, and it generates a micro-economy in which the rules of the game are rewarding those who are creating the value.

C: Inarguably, there is a great deal going on within the context of blockchain. What do you see as the greatest hurdles for adoption?

M: As with any major tech revolution, there are lots of hurdles to overcome. The greatest hurdle can be summed up in one word: legacy. What do I mean in terms of legacy? Not just in terms of infrastructure, but also in terms of regulation – because we are used to thinking of centralized processes where a custodian is needed to ensure things run properly. If the custodians lose power, they become fearsome opponents of the technology, which is absolutely natural.

The other hurdle is the inherent need to create an ecosystem. All the participants in the blockchain would have to shift to this infrastructure. So, if I worked with many partners in the global supply chain, and now I want to move to using blockchain, all the participants have to agree and move to the blockchain as well. We all have to agree on many things – which blockchain to use, if we are ready to shift to electronic records versus paper, if we are ready to invest in re-training and re-skilling our personnel. Are we ready to make so many decisions? Can we agree on them as an ecosystem?

C: Where do you see potential for the most growth in terms of industry applicability?

M: Sharing information, banking, provenance and tracking in supply chains, healthcare, the mortgage industry, and in general all the paper consuming industries can really be streamlined, saving money, billions of dollars, just by adopting blockchain.

A crucial aspect can be seen in blockchain smart contracts, which have great potential to automate several tasks in many industries through the deployment of so-called “RPA” (Robotic Process Automation). Smart Contracts can eliminate the need for custodians (and the afferent costs which are not at all negligible!) by ensuring that e.g. a payment is executed when a condition is fulfilled (e.g. goods have been delivered by a self-driving truck), and so on.

C: If you were to offer three key takeaways for organizations exploring block chain, what would they be?

M:Consider your most strategic efficiencies in accounting, keeping track of records and processes that include several participants, requiring the same information to be shared. That’s where the distributed ledger can bring the greatest cost savings for organisations.

The second would be to re-evaluate your role as an intermediary. Consider how this is challenged by blockchain in your industry. For instance, consider a wallet with a peer-to-peer money exchange instead of a traditional banking account; or an advertisement via centralized social networking platforms vs the direct business to consumer model spearheaded by Sapien.Network; personalized medicine and how this is changing the power balance where the patient is empowered rather than the medical doctor or the insurance company.

The fact is, sooner or later, you will be disrupted by those who adopted blockchain more quickly. Technology evolves exponentially and you will be dislocated overnight without realizing it! Ultimately, the quicker you are adapted, the more prepared you are for this unavoidable wave of disruption. Start planning to allocate resources for a blockchain ‘garage’, to test new concepts and models of doing business in the new decentralized peer-to-peer economy.

About Endor.com

Endor is a predictive analytics engine rooted in the MIT invented science of “social physics”. For companies that value fast time to insight without putting customer data at risk, Endor offers the first automatic prediction platform with the unique capability to analyze encrypted data.

Endor are the first ever organization to integrate both an enterprise business and a crypto protocol feeding into each-other naturally to deliver best results for everyone through access to more data and a larger range of improved predictions. By processing encrypted data on and off blockchain Endor is solving the privacy paradox. Learn more about their work from Dr. Mihaela at this year’s FinTech Connect – check out the agenda here.

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